The government announced its new high-tech design for $100 bills in April with much hoopla, including an epic YouTube trailer. But there's been a small glitch since then: $110 billion of them have been printed incorrectly.

The Federal Reserve is rolling out new $100 bills. Pity. We quite liked the current design: clean,…
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The Treasury's trailer from April announcing the new bill, above, shows off its high-tech security features, such as "a 3-D security strip and a color-shifting image of a bell designed to foil counterfeiters." These exotic features caused some problems with the first batches of printing, as the government discovered after a mere $110 billion worth had been created:

At the time, officials announced the new bills would incorporate sophisticated high-tech security features, including a 3-D security strip and a color-shifting image of a bell designed to foil counterfeiters.

But the production process is so complex, it has instead foiled the government printers tasked with producing billions of the new notes.

An official familiar with the situation told CNBC that 1.1 billion of the new bills have been printed, but they are unusable because of a creasing problem in which paper folds over during production, revealing a blank unlinked portion of the bill face.

A second person familiar with the situation said that at the height of the problem, as many as 30 percent of the bills rolling off the printing press included the flaw, leading to the production shut down.

The bills have been quarantined in "huge vaults" in Texas and Washington, according to the government. Also possible: The money is perfectly fine and the government just gave it to big banks or something.